US: Fill 'er up with ... coal? Coal-to-diesel plant closer to reality

John Rich Jr., whose family has worked the anthracite coal seams of eastern Pennsylvania for a century, plans to turn a $100 million grant from the U.S. Department of Energy into the nation's first commercial plant converting waste coal, or culm, into low-emissions diesel fuel.

Updating a technology first developed by German scientists in the 1920s, the $612 million plant would produce 5,000 barrels of diesel a day, eliminate hundreds of unsightly culm banks, and provide jobs in a region that sorely needs them. If it succeeds, plants could spring up in West Virginia, Illinois and Kentucky.

As Rich escorts a visitor around his coal yards in Gilberton - his Jeep shaking and shuddering over rough roads that wind their way around the culm banks - the 51-year-old entrepreneur preaches the gospel of clean coal.

Environmentalists ridicule the phrase as an oxymoron, but President Bush has promoted clean coal technology as an alternative to foreign oil.

"We are so acclimated to OPEC influencing the price at the pump, and we just accept it," said Rich, referring to the international cartel that supplies more than a third of the world's oil. "It doesn't have to be that way."

Rich, whose underwriter is working with 10 to 15 banks to provide the funding for the plant, hopes construction will start in spring of 2005. But he concedes that the date is a moving target; past predictions have fallen flat.

While it would be a first in the United States, coal-to-diesel technology has been used for decades in other parts of the world.

During World War II, coal gasification and liquefaction produced more than 50 percent of the liquid fuel used by the German military. A worldwide oil embargo on South Africa's apartheid regime forced that nation to derive much of its transportation fuel from coal.

The 1970s energy crisis sparked interest in coal-to-diesel plants in the United States, but none got beyond the proposal stage. Cheap gasoline made coal-to-diesel economically indefensible in the 1990s. But now, with oil prices stuck at near-record highs, the idea is beginning to gain traction.

Another company, Rentech Inc., is mulling the feasibility of a coal-to-diesel plant in Wyoming, while Penn State scientists are working to turn coal into fuel for fighter jets.

Harold H. Schobert, director of The Energy Institute at Penn State University, said Rich's coal-to-diesel plant is "eminently feasible" - both technically and economically.

"The traditional argument is that a synthetic fuel produced from coal or other resources is always somewhat more expensive than a liquid fuel we would make from petroleum. That argument is true until you begin to look at the impact (of foreign oil) on the net American economy," taking into account military spending to defend foreign oil interests, Schobert said.

Rich's company, Waste Management & Processors Inc., is sitting on more than 100 million tons of waste coal - enough to keep a coal-to-diesel plant running for decades.

The process involves feeding waste coal into a gasifier, where it is mixed with oxygen and water and heated to 2,500 degrees Fahrenheit to produce synthetic gas, or syngas. The syngas undergoes another chemical reaction to become paraffin wax. The wax is then refined into diesel.

There is a ready market for diesel. Most heavy trucks run on diesel fuel, as does heavy equipment and watercraft.

Rich said he sees coal-to-diesel not only as a money-making opportunity, but also as a chance to eliminate the blight that anthracite coal mining left behind. But some environmental groups said Rich's idea would do more harm than good.

Mike Ewall, an environmental activist from Philadelphia, said it would be far better to plant beach grass on the culm piles than to use up the coal. He said a plant would produce tons of slag and soot and liberate mercury and other toxins now safely trapped inside the coal.

"Obviously the waste coal piles are damaging, but rushing to (process them) and pretend that's a solution is not the best thing either," said Ewall, who set up a Web site that criticizes Rich's project.

But Rich said a coal-to-diesel plant is far cleaner than traditional coal-burning power plants, and liquid fuel produced from coal is cleaner-burning than regular diesel.

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